TPG Pace Energy Holdings Announces $2.66 Billion Business Combination With EnerVest’s South Texas Division to Form Publicly Traded Magnolia Oil & Gas Corporation

Formation of Magnolia creates a large-scale, oil-weighted, pure-play
South Texas independent oil and gas operator

Assets include top-tier positions in the Eagle Ford and Austin Chalk
in the core of Karnes County and an extensive position in the Giddings
Field, an emerging high-growth Austin Chalk play

TPGE Chairman and CEO Steve Chazen will lead Magnolia on a full-time
basis and reunite with another Occidental Petroleum
veteran, Christopher Stavros, who will become CFO

HOUSTON–(BUSINESS WIRE)–TPG Pace Energy Holdings Corp. (“TPGE”) (NYSE: TPGE, TPGE.U, TPGE.WS),
an energy-focused special purpose acquisition entity led by former
Occidental Petroleum Corporation CEO Steve Chazen, today announced it
has entered into definitive agreements with certain funds managed by
EnerVest, Ltd (“EnerVest”) to acquire the oil and gas assets within
EnerVest’s South Texas Division for approximately $2.66 billion in cash
and stock. As part of the transaction, TPGE and EnerVest are partnering
to create Magnolia Oil & Gas Corporation (“Magnolia”), a new company led
by Chazen who will serve as Magnolia’s full-time Chairman, President and
CEO. EnerVest will retain a significant ownership stake in Magnolia. The
transaction is subject to approval by the TPGE shareholders and other
customary closing conditions, and the new company will trade on the NYSE
under a new ticker upon closing, which is expected to occur late in the
second quarter of 2018.

The formation of Magnolia creates a large-scale, pure-play South
Texas operator with top-tier Eagle Ford and Austin Chalk asset positions
with more than 40,000 boe per day of production. Magnolia will
acquire EnerVest’s approximately 360,000 total net acres in South Texas,
which consists of approximately 14,000 net acres in one of the most
prolific sections of Karnes County and 345,000 net acres in the
emerging, high-growth potential Giddings Field. The acreage position is
almost entirely held by production, and the production from the combined
asset base is heavily weighted toward oil. We believe the combination of
superior operating margins and attractive new well economics will allow
Magnolia to deliver high-return, self-funded production growth and
generate substantial free cash flow after drilling capital. In addition
to Chazen’s leadership, Magnolia will benefit from the corporate
support, experience and local knowledge of EnerVest’s South Texas team,
which will continue to operate the assets following the closing of the
transaction under a long-term services agreement with EnerVest.

TPG Pace Group and Chazen formed TPGE in early 2017 with the intent to
build a large scale, focused oil and gas business with a meaningful
production base, strong free cash flow and a disciplined financial
return philosophy. Following its IPO in May 2017, TPGE began its search
for attractive assets that would benefit from Chazen’s operating
approach and succeed as a public company with low leverage. A veteran of
the oil and gas sector, Chazen has an established track record with more
than 25 years of experience implementing disciplined growth strategies
and generating shareholder value in the public markets. Upon
closing, Chazen will be joined by his long-time colleague and business
partner, Christopher Stavros, who will serve as the company’s Chief
Financial Officer. Most recently, Stavros served as CFO of Occidental
Petroleum Corporation. Chazen and Stavros share the philosophy of
generating attractive full-cycle returns while maintaining a strong
balance sheet with low leverage.

“In creating Magnolia, we have a unique opportunity to build a new
company anchored by what we consider to be some of the highest quality
oil producing acreage in the country,” said Chazen. “We believe
Magnolia’s acreage in Karnes County has some of the best economics in
the United States and, when coupled with the upside in the Giddings
Field, is a great fit with our criteria. Our objective is to maximize
shareholder returns by generating steady production growth, strong
pre-tax margins in excess of industry norms and significant free cash
flow. Assuming moderate commodity prices, we plan to invest less than
60% of cash flow to fund a drilling program that consistently delivers
more than 10% annual production growth. I look forward to leading this
rigorous capital allocation process at Magnolia for the benefit of our
shareholders and employees.”

“I have known Steve for more than 20 years and I cannot think of a
better executive to lead Magnolia,” said EnerVest CEO and founder John
B. Walker. “The playbook he perfected at OXY is a great match for
the outstanding acreage we have assembled in South Texas over the last
10 years. All of us at EnerVest look forward to partnering with Steve as
he builds Magnolia going forward.”

“We formed TPGE with Steve to build a differentiated oil and gas asset
that was positioned for success in the public markets,” said Michael
MacDougall, Senior Partner of TPG and Managing Partner for TPG Pace
Energy. “Steve has a longstanding reputation for
driving strong financial results and accountability, traits that are
becoming more important to investors. This transaction reflects
our philosophy of matching accomplished executives with great assets and
the proper capital structure to maximize our value creation plan.
Magnolia brings world-class executives, outstanding assets and now a
blue-chip investor base together in a compelling manner, and we are
proud to partner with Steve and the larger team at the start of this
exciting journey.”

Magnolia Company Highlights1

• High-quality, oil-weighted pure-play South Texas operator
• Approximately 40,000 boe per day of current net production with 31,000
  boe per day in Karnes County and 9,000 boe per day in Giddings Field
• Total production base is 62% oil and 78% liquids
• Roughly 360,000 net acres, including 14,000 net acres in the core of
  Karnes County
• Industry leading all-in-cost and full cycle economics in Karnes County
  with break-evens in the low $30’s per barrel
• Estimated new well paybacks of less than one year in both Karnes
  County and Giddings Field
• Strong financial profile with low leverage, strong liquidity and
  substantial cash flow generation after capital requirements of the
  planned rig program
• Estimated 2018 EBITDA of $513 million and approximately $240 million
  of estimated 2018 free cash flow after capital investment2
• Industry leading 10% free cash flow yield3. Very low
  leverage (0.6x 2018 estimated EBITDA) and more than $500 million of
  initial liquidity

Transaction Details

On March 20, 2018, TPGE entered into definitive agreements to
acquire EnerVest’s South Texas Division for approximately $2.66 billion
in cash and stock.4 Upon the closing of the business
combination, the company will be renamed Magnolia Oil & Gas Corporation.
With an anticipated initial enterprise value of $2.66 billion and
an estimated $513 million of EBITDA for 2018, the transaction is valued
at approximately 5.0x 2018 estimated EBITDA. The company will largely be
equity financed as TPGE anticipates $300 million of funded debt (0.6x
2018 estimated EBITDA) at closing alongside a $550 million undrawn
credit facility. EnerVest will receive approximately $1.2 billion in
cash at closing and will retain roughly 120 million shares of common
stock.

In connection with the transaction, TPGE has entered into agreements to
raise approximately $330 million through a private placement of roughly
33.0 million shares ($10.00/share) of Class A common stock.
This placement was anchored by certain funds and accounts managed by
Fidelity Management & Research Company, Davis Selected Advisers, L.P.
and certain funds managed by Capital Research and Management Company and
included several other leading institutional investors. In addition,
Chazen and certain TPG executives will personally subscribe for an
additional $25 million investment on the same terms. The private
placement is expected to close concurrently with the transaction. The
public float after giving effect to this private placement is expected
to be approximately $1 billion. Assuming no redemptions of TPGE public
shares, the EnerVest funds will own 51% of the issued and outstanding
shares of common stock of Magnolia immediately following the closing,
the TPGE public investors including the PIPE will own 43% and the
remainder will be owned by TPG.

The transaction was unanimously approved by the board of TPGE and
remains subject to the approval of TPGE shareholders and the
satisfaction or waiver of other customary conditions. TPGE has secured
financing commitments for the anticipated funded debt and RBL. After
giving effect to any redemptions by the public shareholders of TPGE, the
balance of the approximately $650 million in cash held in the TPGE trust
account, together with approximately $350 million of private placement
proceeds and the debt financing will be used to pay the seller’s cash
consideration and closing costs. Following the consummation of the
transaction, Magnolia’s ordinary shares will be listed on the NYSE.

Upon closing, Magnolia will maintain a seven person board, which will
include Steve Chazen as Chairman, two appointees named by each of TPGE
and EnerVest and two additional independent directors.

In connection with the transaction, EnerVest’s South Texas operating
team will continue to operate the assets post-transaction under a
long-term services agreement. Under the terms of this services
agreement, EnerVest will provide more than 90 dedicated operating,
technical and field level employees. Additionally, EnerVest will provide
shared services for certain corporate functions under this agreement.
Following the closing, EnerVest may earn up to an additional 17 million
shares if certain operating and/or stock price targets are achieved.
Please see the investor presentation for more detail.

Advisors

Credit Suisse Securities (USA) LLC acted as financial advisor to TPGE,
Deutsche Bank Securities Inc. and Goldman, Sachs & Co. acted as capital
markets advisors to TPGE; Vinson & Elkins L.L.P. acted as legal counsel
to TPGE. Citigroup acted as financial advisor and capital markets
advisor to EnerVest; Gibson, Dunn & Crutcher LLP acted as legal counsel
to EnerVest.

Investor Webcast and Presentation Information

At 10:00 am EST on March 20, 2018, TPGE will be holding an investor
conference call to discuss the transaction. For those who wish to
participate, the domestic toll-free access number is (877) 389-1525 and
the international toll-free access number is (614) 610-4601. Once
connected with the operator, please provide the Conference ID number of
8783808 and request access to the Magnolia Transaction Announcement
Investor Call.

A replay of the call will also be available from 1:00 pm EST on March
20, 2018 to 11:59 pm EST on March 27, 2018. To access the replay, the
domestic toll-free access number is (866) 247-4222 and participants
should provide the Conference ID number of 8783808 and request access to
the Magnolia Transaction Announcement Investor Call.

About Magnolia Oil & Gas Corporation

Following completion of the transaction, Magnolia Oil & Gas
Corporation will be a publicly traded oil and gas exploration and
production company with South Texas operations in the core of the Eagle
Ford. Magnolia will focus on generating value for shareholders through
steady production growth and free cash flow. For more information, visit www.magnoliaoilgas.com.

About TPG Pace Group and TPG Pace Energy Holdings

TPG Pace Group is TPG’s dedicated permanent capital platform. Led by TPG
partner Karl Peterson, the platform was created in 2015 with the
objective of sponsoring special purpose acquisition companies and other
permanent capital solutions for companies. TPG Pace Group has a
long-term, patient, and highly flexible investor base, allowing it to
seek compelling opportunities that will thrive in the public
markets with its sponsorship. TPG Pace Group has sponsored three
SPACs and has raised roughly $2 billion since 2015. The first of these
vehicles was used to sponsor the public listing of Playa Hotels and
Resorts in March of 2017 (NASDAQ: PLYA).

TPG Pace Holdings (NYSE: TPGH, TPGH.U, TPGH.WS) raised $450 million in
its June 2017 IPO and is currently seeking targets for a business
combination that are suited to generate strong returns in a public
market environment while benefitting from the broader operational
knowledge, resources and private equity heritage of its team and TPG.
For more information, visit www.tpg.com/tpg-pace-holdings.

TPG Pace Energy Holdings Corp. is a $650 million special
purpose acquisition company formed by TPG Pace Group and Occidental
Petroleum Veteran Steve Chazen that went public on the NYSE in May of
2017. TPGE was formed with the intent to build a large scale, focused
oil and gas business with a meaningful production base, strong free cash
flow and a disciplined financial return philosophy. Following its IPO,
TPGE began its search for attractive assets that would fit
with Chazen’s operating approach and succeed as a public company with
low leverage. For more information, visit www.tpg.com/pace-energy.

About EnerVest

Houston-based EnerVest, founded in 1992, acquires, develops and operates
oil and gas fields in 14 states on behalf of its investors.

Forward-Looking Statements

The information in this press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of present or historical fact included in this press release,
regarding the proposed acquisition discussed herein, TPGE’s ability to
consummate the transaction, the benefits of the transaction and
Magnolia’s future financial performance following the transaction, as
well as Magnolia’s strategy, future operations, financial position,
estimated revenues, and losses, projected costs, prospects, plans and
objectives of management are forward looking statements. When used in
this press release, the words “could,” “should,” “will,” “may,”
“believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the
negative of such terms and other similar expressions are intended to
identify forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking
statements are based on management’s current expectations and
assumptions about future events and are based on currently available
information as to the outcome and timing of future events. Except as
otherwise required by applicable law, TPGE and Magnolia disclaim any
duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect events
or circumstances after the date of this press release. TPGE cautions you
that these forward-looking statements are subject to all of the risks
and uncertainties, most of which are difficult to predict and many of
which are beyond the control of TPGE, incident to the development,
production, gathering and sale of oil, natural gas and natural gas
liquids. In addition, TPGE cautions you that the forward-looking
statements contained in this press release are subject to the following
factors: (i) the occurrence of any event, change or other circumstances
that could delay the business combination or give rise to the
termination of the agreements related thereto; (ii) the outcome of any
legal proceedings that may be instituted against TPGE following
announcement of the transactions; (iii) the inability to complete the
business combination due to the failure to obtain approval of the
shareholders of TPGE, or other conditions to closing in the transaction
agreement; (iv) the risk that the proposed business combination disrupts
TPGE’s current plans and operations as a result of the announcement of
the transactions; (v) Magnolia’s ability to realize the anticipated
benefits of the business combination, which may be affected by, among
other things, competition and the ability of Magnolia to grow and manage
growth profitably following the business combination; (vi) costs related
to the business combination; (vii) changes in applicable laws or
regulations; and (viii) the possibility that Magnolia may be adversely
affected by other economic, business, and/or competitive factors. Should
one or more of the risks or uncertainties described in this press
release, or should underlying assumptions prove incorrect, actual
results and plans could different materially from those expressed in any
forward-looking statements. Additional information concerning these and
other factors that may impact the operations and projections discussed
herein can be found in TPGE’s periodic filings with the Securities and
Exchange Commission (the “SEC”), including its Annual Report on Form
10-K for the fiscal year ended December 31, 2017. TPGE's SEC filings are
available publicly on the SEC’s website at www.sec.gov.

No Offer or Solicitation

This press release is for informational purposes only and shall not
constitute an offer to sell or the solicitation of an offer to buy any
securities pursuant to the proposed business combination or otherwise,
nor shall there be any sale of securities in any jurisdiction in which
the offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act.

Important Information for Investors and Shareholders

In connection with the proposed business combination, TPGE intends to
file a proxy statement with the SEC. The definitive proxy statement and
other relevant documents will be sent or given to the shareholders of
TPGE and will contain important information about the proposed business
combination and related matters. TPGE shareholders and other interested
persons are advised to read, when available, the proxy statement in
connection with TPGE’s solicitation of proxies for the meeting of
shareholders to be held to approve the business combination because the
proxy statement will contain important information about the proposed
business combination. When available, the definitive proxy statement
will be mailed to TPGE shareholders as of a record date to be
established for voting on the business combination. Shareholders will
also be able to obtain copies of the proxy statement, without charge,
once available, at the SEC’s website at www.sec.gov.
In addition, shareholders will be able to obtain free copies of the
proxy statement by directing a request to: TPG Pace Energy Holdings
Corp., 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102, email: [email protected],
Attn: Mike Gehrig. The information contained on, or that may be accessed
through, the websites referenced in this press release is not
incorporated by reference into, and is not a part of, this press release.

Participants in the Solicitation

TPGE, EnerVest and their respective directors and officers may be deemed
participants in the solicitation of proxies of TPGE’s shareholders in
connection with the proposed business combination. TPGE shareholders and
other interested persons may obtain, without charge, more detailed
information regarding the directors and officers of TPGE in TPGE’s
Registration Statement on Form S-1 initially filed with the SEC on April
17, 2017. Additional information will be available in the definitive
proxy statement when it becomes available.

1 For additional information regarding the assumptions used
with respect to the below company highlights please see the Investor
Presentation available on Magnolia’s website.

2 TPGE defines free cash flow as EBITDA less capital
expenditure.

3 TPGE defines free cash flow yield as EBITDA less capital
less interest divided by market capitalization at $10 per share.
Estimated 2018 projection.

4 The $2.66 billion enterprise value includes the effect of
TPGE’s sponsor shares.

Contacts

For Magnolia Oil & Gas Corporation
Mike Gehrig,
713-627-2223
[email protected]
or
For
TPGE
Luke Barrett, 415-743-1550
[email protected]
or
For
EnerVest
Ron Whitmire, 713-495-6525
[email protected]